The Study On Tax Policies Promoting The Development Of Modern Services Industry

China is in the period of accelerated development of industrialization, urbanization,marketization and internationalization. Promoting the development of modern servicesindustry in our country is the necessary way to accelerate transformation of the mode ofeconomic development and promote upgrading of the industrial structure. As an importantway for government to regulate the economy, tax policy can not only affects the enterpriseproduction cost on the microscopic, but also decided the optimization configuration oftechnical and industrial structure on macroscopic. At present modern services industrymainly pay business tax and income tax. But the business tax results in double taxation,which increases tax burden of the modern services industry. There is also lack of incometaxation exemption. Other countries, like US use many taxation exemptions to promote themodern services industry. Our government should learn experience from international andcontinue to reform the VAT. Then modern services industry will pay VAT in circulationtax. In addition government ought to make preferential tax system according to industrialpolicy, and to promote sound and rapid development of the modern services industry.This paper includes five chapters:Ⅰ. Introduction. Firstly this paper elaborates the research background of modern servicesindustry tax policy. Secondly, this paper reviews the research achievements of modernservices industry both in domestic and foreign. Foreigners researches mainly on therelationship between producer services development and economic growth. Domesticscholars mostly concentrate on disadvantage of the services industry paying business taxrather than VAT. Finally, this paper established its research method, ideas and innovationsaccording to the literature.Ⅱ. Theoretical basis of the thesis. Introduces the concept, characteristics and classificationof modern services industry.For there is not a unity agreement on the scope of the modernservices industry, this paper attempts to define modern services industry. Analyze thenecessity and feasibility of taxation promoting modern services industry, which madenecessary theoretical foundation for the next research.Ⅲ. Tax policy on modern services industry. This paper reviewed briefly several taxationreforms since the3rd session of the11th CPC meeting. Business tax is the main kind of circulation tax on services industry. But this lead to double taxation phenomenon and VATdeduction chain rupture. Income tax exemption on services is not suitable.Ⅳ. International experiences. This paper introduces tax policy on modern services industryof United States, Singapore and South Korea. These countries impose VAT on servicesrather than business tax. This avoid double taxation phenomenon. What，s more, thesecountries give a series of income tax preferential policy to the logistics, software andservices industry, which can promote the development of their economy.Ⅴ. Suggestions. After Shanghai VAT reform, our government should broaden VAT rangefrom the region, industry, and other aspects. This measure can eliminate the doubletaxation on the services industry which existed for many years. Income tax exemptionsystem is also need to be established.